The short answer
A commercial cleaning business in Australia is usually priced as a multiple of its normalised annual earnings. Bsale, an Australian business-for-sale marketplace, says cleaning businesses are usually appraised on a multiple of the net profit to the owner. That is the right starting point, provided the owner's own wage is deducted first. This page does not quote a market multiple, because the published figures for this sector are largely asking prices on listing sites rather than settled sales. Bsale's marketplace showed an average asking price of about $359,000 across roughly 540 advertised cleaning businesses when checked in October 2026, which suggests the typical business is small and says nothing about what any one of them is worth. What moves the price is the contract book: the margin each contract earns after award wages, how long each is likely to last, whether it can move to a buyer, and whether the workforce has been classified and paid correctly.
What the buyer is really paying for: contracts that must keep being won
A cleaning company owns little that a buyer cannot replace. Equipment and vehicles matter but are modest next to the earnings. What it owns is a set of service contracts, usually priced on an hourly rate for a set schedule (Bsale describes commercial cleaners working a certain number of hours on a set schedule, such as cleaning an office after work hours), and the crew and supervisors who deliver them. Earnings are the spread between what clients pay and what the award requires the business to pay its cleaners, so wages, normally the largest cost line in a service delivered by people, decide the result. A buyer therefore values the business contract by contract. Which contracts still earn a margin at current award rates? Which were won on price? Which depend on a relationship the owner personally holds with a property or facility manager? That last group is personal goodwill, which does not transfer automatically on sale, so a handover that introduces the buyer to each client is part of what makes the book saleable. Revenue multiples are a crude cross-check, because revenue at a thin margin and revenue at a healthy margin are different assets.
Award wages and contract margin: the value drivers
Staffed contract cleaning businesses are generally covered by the Cleaning Services Award 2020 (MA000022), which covers employers in the contract cleaning services industry and, according to the Fair Work Ombudsman, labour hire businesses placing workers in it. Award minimum wages are reviewed every year; the 2026 review lifted them by 4.75 per cent from the first full pay period on or after 1 July 2026. The Fair Work Ombudsman's pay guide from that date shows a full-time Level 1 cleaning service employee at $27.08 an hour, with weekday shifts finishing after 6pm paid at 115 per cent of that rate, Saturdays at 150 per cent, Sundays at 200 per cent and public holidays at 250 per cent. Part-time employees attract a further 15 per cent allowance, casuals a 25 per cent loading, and part-time and casual staff generally must be rostered for at least two, three or four consecutive hours depending on site size. Office cleaning is commonly done after hours, so loadings are part of the base cost. The valuation question is whether contract prices keep up: a fixed-price contract signed before an award increase earns a thinner margin unless a review clause passes increases through. The evidence a buyer or valuer asks for:
- ·A contract schedule: client, site, hours and frequency, price, start and end dates, notice period and price-review clause
- ·Margin by contract: revenue less labour costed at current award rates, including loadings and minimum shift lengths
- ·Price-review history set against award increases
- ·Payroll reconciled to award classifications and rates, with superannuation paid (from 1 July 2026 employers must pay super with each payday under Payday Super)
- ·Portable long service leave registrations and levy returns where the business cleans in Queensland, New South Wales or the ACT, each of which has a contract cleaning scheme
- ·Crew stability: turnover, and how many sites depend on one supervisor
- ·Any history of underpayment findings, back-pay or complaints to the Fair Work Ombudsman
Owner-operator rounds, staffed contractors and specialists price differently
The sector is not one business model. An owner-operator round, where the owner cleans personally, earns mostly a wage for the owner's labour: once a market wage is deducted the remaining profit can be small, and the price looks more like the value of a transferable client list than a company multiple. A staffed commercial contractor with supervisors is priced on contract quality, and it is the model a buyer can scale. Specialist businesses (the award recognises specialist work such as cleaning and restoration and damaged property cleaning, as well as event cleaning and trolley collection) can earn different margins but often depend on irregular work, so the test is how much of the revenue repeats. Household rounds are often cancel-at-any-time arrangements, a weaker guide to future earnings than a commercial contract with a notice period. A managing contractor that sells contracts and delivers them through subcontractors or labour hire carries little payroll, but its margin depends on how those workers are engaged, which is the risk covered below.
Contract terms: termination, assignment and change of control
Start with how long a contract really lasts. A twelve-month term that the client can end without cause on short notice is worth less than a longer committed term with a genuine renewal right: the notice period is the real term. Next, can the contract move? In an asset sale, client contracts generally have to be assigned or novated to the buyer, which usually needs the client's consent. In a share sale the contracting company does not change, but the contract may contain a change-of-control clause that lets the client terminate or renegotiate. Bsale's guide for sellers notes that a solicitor should review key contracts, such as leases and supplier agreements, that an ownership transfer could affect; client contracts need the same review. A buyer may make consent on the largest contracts a condition of completion, or tie part of the price to those contracts surviving. Then consider the workforce if a contract is lost. Under clause 29 of the Cleaning Services Award, an employer expecting a cleaning contract to end must give affected employees written notice at least 28 days before it ends (or as soon as practicable if later), and under clause 33.4 National Employment Standards redundancy pay can still apply where neither the outgoing nor the incoming contractor offers an employee acceptable employment. A lost contract can therefore carry a redundancy cost on top of the lost margin, and a valuation should estimate both.
Subcontractors and sham contracting: the liability behind the goodwill
Some cleaning businesses deliver work through individuals with ABNs rather than employees. That can be legitimate where the person genuinely runs their own business, but the label does not decide it. From 26 August 2024, constitutionally covered businesses (usually those with Pty Ltd or Ltd in the name, according to the Fair Work Ombudsman) apply the whole of relationship test under the Fair Work Act: the real substance, practical reality and true nature of the relationship, including control, financial risk, who supplies tools, the ability to subcontract, hours and expectation of continuing work. It is unlawful to represent to a worker that they are a contractor when the business does not reasonably believe it, and the maximum penalties per contravention published by the Fair Work Ombudsman in 2026 are $546,000 for a business with more than 15 employees and $21,840 for an individual (Fair Work Act sections 357 to 359). Other laws use their own tests. The ATO treats a contractor paid mainly for their own labour as an employee for superannuation guarantee purposes, ABN or not. Revenue NSW says payments to contractors are liable for payroll tax unless an exemption applies. Queensland's contract cleaning long service leave law defines a worker to include people engaged for labour only or substantially labour only. The Fair Work Ombudsman has pursued the issue in this sector: in a Federal Court proceeding started in 2023 about subcontracted cleaners at a maintenance site, it alleged that cleaners were required to obtain ABNs and sign contractor agreements at flat rates of $20 to $22 an hour. That is an allegation, not a finding. For valuation this is a liability, not a multiple question: back-pay, superannuation, levies and penalties come off the price or sit behind warranties, retentions and indemnities, and the earnings a buyer capitalises must carry the true award-based labour cost. A share buyer inherits the company's exposure; in an asset sale, who bears it depends on the contract terms and legal advice.
A worked example: correcting the labour cost
Consider a hypothetical commercial cleaning company with 30 office contracts and annual revenue of $1,500,000. Reported EBITDA is $270,000, but the owner runs operations full time and draws no wage. Deducting an assumed market salary of $110,000 gives $160,000. Diligence then finds that one crew, about 2,500 hours a year, is engaged through ABNs at a flat $26 an hour with no superannuation. If those workers were in fact employees on the 2026-27 Level 1 casual rate for weekday work finishing after 6pm ($37.91 an hour), the annual cost would be 2,500 hours at $37.91, or $94,775 in wages plus 12 per cent superannuation of $11,373, a total of $106,148 before workers compensation and any payroll tax, against $65,000 actually paid. Correcting the cost lowers maintainable EBITDA by $41,148, from $160,000 to $118,852. At an assumed multiple for illustration of 2.5 times EBITDA (not a market benchmark), that supports $297,130. Now test the contract book. The largest contract is $150,000 a year (10 per cent of revenue) and the client can end it without cause on 60 days' notice (assumed). If it contributes $45,000 a year after direct labour and no overhead falls away, losing it leaves maintainable EBITDA of $73,852, which supports $184,630 at the same assumed multiple. The $112,500 gap is why a buyer may ask for the client's consent, a retention or an earn-out. The historic shortfall is separate: if the ABN arrangement has run for two years (assumed), it is about $82,296 at current rates before penalties and interest, to be deducted from the price or held back, not capitalised. Every figure here is illustrative, not a benchmark.
What a defensible cleaning business valuation file contains
A cleaning valuation is won or lost on evidence about contracts and labour. The file that supports a range typically contains:
- ·Three to five years of financial statements plus year-to-date trading, reconciled to bank, BAS and payroll records
- ·Every material contract: term, notice and termination rights, renewal, price review, assignment and change-of-control clauses
- ·Margin by contract and site at current award rates, including loadings, public holidays and minimum shifts
- ·Payroll, classification and superannuation reconciliations, and portable long service leave returns where they apply
- ·For every subcontractor: the agreement, invoices, evidence of how the person actually works (control, tools, ability to delegate, other clients) and taxable payments annual report lodgements
- ·A normalisation schedule with evidence for each adjustment, above all the owner's market wage and supervision time
- ·Client concentration, the renewal and tender calendar, and any client notices
- ·Employee liabilities and contingent exposures: accrued leave, back-pay risk and unpaid levies
- ·Comparable completed transactions where settled prices are available, with sensitivity analysis
When the number has consequences
A self-assessment using the framework above costs nothing and is often enough for early thinking. A formal valuation becomes worth commissioning when the number has consequences someone else can test: preparing the business for sale, where a buyer will test the contract schedule and the payroll; a shareholder or partner exit; family law matters, where the business interest must withstand scrutiny from the other side; and CGT events, including small business CGT concession claims under Division 152 of the ITAA 1997, where eligibility can turn on documented values and the $6 million maximum net asset value test. The market value standard is the willing but not anxious buyer and seller of Spencer v Commonwealth (1907), reflected in the ATO's guidance titled 'Market valuation for tax purposes'. Oliver Group prepares independent valuations only. We are not a tax agent and do not give tax, legal or financial advice; your accountant and lawyer apply the valuation in their own fields. Our reports follow the guidelines of APES 225 Valuation Services. Oliver Group's fees are set by the annual turnover of the business: a Small Business Valuation is $1,495 + GST for turnover under $2 million, a Medium Business Valuation is $2,495 + GST for turnover between $2 million and $10 million, and a Large Business / Start-Up Valuation is $3,495 + GST for turnover over $10 million or for a start-up. A small-business draft is delivered in 2 business days and a medium-business draft in 3 business days; the delivery date for a Large Business / Start-Up Valuation is agreed before commencement. Delivery time starts once payment and all required information have been received. The fee is fixed in writing before work begins and never depends on the concluded value.